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Today, the Federal Communications Commission approved a controversial Order deregulating incumbent pricing power in the business data services (“BDS”) market. BDS are high-capacity broadband connections purchased by businesses of all sizes as well as schools, libraries, and government agencies. They’re also utilized by wireless carriers to connect towers and cell sites. The Order will permit incumbent telephone carriers to raise prices on business broadband customers across most of the United States.
The following can be attributed to Phillip Berenbroick, Senior Policy Counsel at Public Knowledge:
“For more than a decade, the Commission has investigated excessively high rates and anti-competitive conduct in the BDS market. Dominant telecommunications providers have long abused their incredible market power, and American businesses and consumers have suffered the consequences in the form of reduced economic growth and job creation, lower business investment in new operations and products, and higher prices passed on to consumers for goods and services.
“In 2014 and 2015, the FCC collected data on the BDS market in the largest data collection in the agency’s history. The data showed that approximately 97 percent of business customer locations had access to two or fewer BDS providers, with nearly three-in-four locations with only a monopoly provider. In some form of twisted logic, this FCC has determined these market conditions constitute ‘intense’, ‘robust’ and even ‘vigorous’ competition.
“Instead of taking action to promote competition and deployment, serve the public interest, and prevent the exercise of market power that is a drag on the U.S. economy, Chairman Pai and Commissioner O’Reilly have approved an Order that doubles down on incumbent market power, forcing businesses, hospitals, schools, and ultimately consumers to pay more for essential connectivity.
“Wireless networks, which rely on BDS for carrying a portion of their traffic, are also likely to deploy more slowly and reach fewer Americans due to higher prices. Ultimately, these price hikes will be passed on to consumers, and American families and businesses will pay dearly for the green light the FCC has given to the unfettered exercise of market power by dominant telecommunications providers.”
You may view our latest video on the FCC’s anti-consumer agenda here.